June 7:
Adidas Brazuca, the official match ball of the 2014 FIFA World Cup. (Internet photo)
To be a sponsor for the FIFA World Cup, a company needs to pay at least US$68 million and more than US$120 million for a national partnership, but the only Chinese sponsor for the upcoming FIFA World Cup in Brazil, Yingli Solar, feels the investment is worth it, Guangzhou's 21st Century Business Herald reports.
The World Cup is set to be the most expensive in the tournament's history, and possibly also the most lucrative, with expected business revenue of US$4 billion, profits for Brazil of US$14 billion, and the winning team to get a record prize of US$35 million, according to a recent report by the Associated Press. The home team is also the favorite to lift the trophy for a sixth time.
FIFA's income chiefly comes from broadcasters, which contributed US$2.6 billion, and sponsors, who have paid US$1.4 billion.
Since the 2006 World Cup in Germany, FIFA has adjusted its sponsorship structure, with a three-tier sponsor threshold and preference for those who conform to the spirit of the championship.
Yingli was chosen because of FIFA's wish to promote green energy.
This year there were six first level global partners, including Adidas, Coca-Cola, Hyundai-Kia Automotive Group, Emirates, Sony and VISA, each contributing at least US$120 million.
The second level comprises eight sponsors, including Yingli, each contributing at least US$68 million.
The third level is restricted to eight sponsors from the host country, Brazil, each paying more than US$21.3 million on average, with all sponsors agreeing not to reveal individual payments.
In the Japan-Korea World Cup in 2002, Hyundai Motors paid US$2 billion to be the tournament's official sponsor, boosting its US sales growth that year to 40%, with its brand recognition doubling from 32% to 67%.
Yingli spokesperson Liang Tian said the sponsorship is definitely worth the money — even though the company is among those struggling as China's solar power industry is struggling as a result of having expanded too ambitiously too soon, prompting major trading partners to put up tariffs on Chinese solar panels to protect their own manufacturers. The industry needs a boost, and this could come from the extra exposure that a global sporting event can provide.
Yingli first became a World Cup sponsor at the 2010 tournament in South Africa. In 2009, Yingli's sales volume reached 525 megawatts, which rose to 1.1 gigawatts in 2010 when it became a sponsor, and advanced further to 1.64 gigawatts in 2011. In 2012, when Yingli announced it would sponsor the next World Cup, its sales rose to 2.3 gigawatts, and climbed to 3.2 gigawatts in 2013.
In 2010, Yingli's share price rose nearly 40% during the World Cup.
Even though Yingli sales rose sharply, it still suffered losses as the overall photovoltaic industry is still in its early stages, Liang said.
Source: www.wantchinatimes.com/news-subclass-cnt.aspx?id=20140607000005&cid=1102
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